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A post-bankruptcy Blockbuster will likely be much leaner and a shadow of its former self, which will be a boost to its competitors. Wedbush Morgan analyst Michael Pachter believes that BB’s rivals, particularly Redbox, should be able to absorb the large number of consumers a streamlined and simplified Blockbuster will likely be shedding.

Seattle Weekly quotes Pachter as saying the following on the matter:

“In bankruptcy Blockbuster is going to be managed to generate as much cash as possible. They’re going to cut out all marginal stores, defer maintenance, order less inventory and take a long route to liquidation . . . The only way Blockbuster can be more profitable is to be smaller. And a small Blockbuster means more displaced consumers, which means more opportunity for Redbox.”

Can this skeletal BB that Pachter describes be competitive in the marketplace that sent it into bankruptcy? Will these displaced customers flock to Redbox as the analyst predicts?

(via Seattle Weekly)

5 Responses to “Analyst: Blockbuster Bankruptcy to Benefit Redbox”

  1. Visitor [Join Now]
    will [visitor]

    Redbox will see some incremental growth from a drastically slimmed-down (or liquidated) Blockbuster for those without broadband connections who want instant gratification, but that growth will prove short-lived. The kiosk model will hit a saturation point sooner rather than later. Netflix has planned for the future, and it’s coming faster than many of us realize.

  2. Visitor [Join Now]
    bbfan [visitor]

    I will not go to redbox untill they get bluray,and they need plenty of titles which BB has,not just the 2 or 3 big hits that come out every week or so.I hate to see BB go down,for my 16.00 bucks a month,I get at least 12 or more blurays from the mail and can trade in for the new ones on tuesday,the ones stores don’t have I get in the mail.Redbox can never do that,or even get me a bluray in my city.I used to be a fan of redbox before bluray.Now I will not even watch a dvd anymore.They look like crap!

  3. Visitor [Join Now]
    cockhound [visitor]

    Netflix rocks. BB can suck it.

  4. Member [Join Now]
    starman15317

    (at the title) Well duh! Redbox and Netflix will probably do better with a bankruptcy

  5. Visitor [Join Now]
    Nomo Blockbuster [visitor]

    Blockbuster has got to go. That much is clear. What would be unwise would be for Netflix/Redbox to up their prices as a result of Blockbuster’s ultimate disappearance. That would lower value and begin paving the road for that company’s demise as well.